TIDMIDOX
RNS Number : 8869O
IDOX PLC
15 June 2022
15 June 2022
Idox plc
Half Year Results for the six months ended 30 April 2022
Good performance whilst advancing strategy to focus on software
businesses
Idox plc (AIM: IDOX, 'Idox', 'the Company' or 'the Group'), a
leading supplier of specialist information management software and
solutions to the public and asset intensive sectors, is pleased to
announce its unaudited half year results for the six months ended
30 April 2022 ('H1 FY22').
Financial highlights
Continuing operations (FY21 comparatives exclude Idox Content
businesses disposed in H1 FY21) :
Revenue
-- Increased by 7% to GBP33.2m (H1 FY21: GBP31.1m), driven by
double digit growth in Public Sector Software.
-- Recurring revenues(1) increased by 13% to GBP19.8m (H1 FY21:
GBP17.6m), and now account for 60% of the Group's total revenue (H1
FY21: 57%).
Profit
-- Adjusted(2) EBITDA increased by 8% to GBP11.0m (H1 FY21: GBP10.1m).
-- Operating profit increased by 3% to GBP4.3m (H1 FY21: GBP4.1m).
-- Adjusted(2) EBITDA margin consistent at 33% (H1 FY21: 33%).
-- Operating profit margin consistent at 13% (H1 FY21: 13%).
-- Statutory profit before tax GBP3.6m (H1 FY21: GBP3.7m).
-- Adjusted(3) diluted EPS increased by 7% to 1.21p (H1 FY21: 1.13p).
-- Statutory diluted EPS increased by 1% to 0.68p (H1 FY21: 0.67p).
Cash
-- Net debt(4) reduction of 54% in the period to GBP3.8m (31
October 2021: net debt GBP8.1m; 30 April 2021: net cash GBP7.6m).
Comparatives reflect disposal of Content businesses which generated
net proceeds of GBP10.7m in H1 FY21, and three acquisitions
completed in H2 FY21 with initial net consideration of
GBP10.5m.
-- Significant resources in place to fund M&A, including
GBP35m revolving credit facility and GBP10m accordion.
-- Cash generated from operating activities before taxation as a
percentage of Adjusted EBITDA for total operations was 122% (H1
FY21: 169%).
Operational highlights
-- Order intake of c.GBP40m, up 15% from H1 FY21, with strong
pipeline underpinning our confidence over the medium term.
-- Contract wins and extensions with increased average tenure
across both our Public Sector Software and Engineering Information
Management (EIM) businesses.
-- Strong double-digit growth in revenue and profit in Public
Sector Software buoyed by FY21 acquisitions; weaker performance in
EIM due to continued global uncertainties.
-- Integration of 2021 acquisitions substantially complete and to plan.
-- Continued upscaling of Pune, India, centre of excellence to
increase efficiency, capability, and knowledge sharing.
-- Good progress on furthering our M&A pipeline with
strengthened and dedicated team, led by Rob Grubb.
Current trading and outlook
-- Combination of recurring revenue and orderbook, in resilient
Public Sector Software markets, provides good revenue visibility
for the remainder of FY22.
-- EIM expected to deliver improved H2 FY22 performance.
-- The business continues to perform well and in line with the Board's expectations.
David Meaden, Chief Executive Officer of Idox said:
"We continue to make good progress advancing our strategy to
focus on software. Our software solutions deliver value to our
customers through managing their complex operational, legislative,
and regulatory issues, whilst enabling us to maintain long term
relationships with them.
Operationally, the business continues to perform strongly within
our 'Four Pillars' framework. I am particularly pleased with the
progress from the investment we have made in the business; in our
people development, notably our culture of engagement and
leadership, organisational design incorporating our offshore
capabilities, improved management information and automation
programmes. All of this has helped deliver an improved quality of
revenue, with strong margins and underlying cash generation.
Further investments in our M&A team, led by Rob Grubb our
former CFO, has created greater focus and opportunity for further
expansion through acquisitions.
The outlook for the business is promising as we continue to
improve our operational capabilities and build momentum in our
chosen markets. We are now firmly focussed on our 'fly phase' which
we believe will drive value for our key stakeholders."
There will be a webcast at 9:00am UK time today for analysts and
investors. To register for the webcast please contact MHP
Communications at idox@mhpc.com
For further information please contact :
Idox plc +44 (0) 870 333 7101
David Meaden, Chief Executive
Officer investorrelations@idoxgroup.com
Anoop Kang, Chief Financial Officer
Peel Hunt LLP (NOMAD and Broker) +44 (0) 20 7418 8900
Edward Knight
Paul Gillam
James Smith
MHP Communications + 44 (0) 20 3128 8404
Reg Hoare / Matthew Taylor idox@mhpc.com
About Idox plc
For more information see www.idoxgroup.com @Idoxgroup
Alternative Performance Measures
These items are excluded from statutory measures of profit to
present a measure of cash earnings from underlying activities on an
ongoing basis. This is in line with management information
requested and presented to the decision makers in our business; and
is consistent with how the business is assessed by our debt and
equity providers.
(1) Recurring revenue is defined as revenues recognised from
support and maintenance fees, managed service fees (including for
hosting) and Software-as-a-Service subscription fees.
(2) Adjusted EBITDA is defined as earnings before amortisation,
depreciation, restructuring, acquisition costs, impairment,
financing costs and share option costs. Share option costs are
excluded from Adjusted EBITDA as this is a standard measure in the
industry and how management and our shareholders track performance
(see note 11 for reconciliation).
(3) Adjusted EPS excludes amortisation on acquired intangibles,
restructuring, financing, impairment, share option and acquisition
costs (see note 11 for reconciliation).
(4) Net (debt) / cash is defined as the aggregation of cash,
bank borrowings and the long-term bond.
Chair's statement
Introduction
I am pleased to report that the first half of this financial
year has once again seen a robust performance from the Group.
During a period in which the economic environment has become more
difficult due to the war in Ukraine, the lingering effects of the
Covid-19 pandemic and the resulting pressure on costs and talent,
it is pleasing to see the business continue to progress so well and
continue to build momentum.
Following a period of corporate activity in the second half of
FY21, which saw the business become increasingly focussed on its
software operations, we are pleased to report continuing Group
revenues up 7% on the same period last year and a growth of 8% at
EBITDA. This robust performance also translated into a strong cash
performance, with cash generated from continuing operations, before
tax, being GBP13.4m, representing a conversion rate of 122% against
an EBITDA for the period of GBP11.0m.
Once again net debt was considerably reduced, on this occasion
by 54% in the period. The Group is well placed to continue to
execute on our growth strategy supported by selective strategic
acquisitions, with GBP7.1m of available cash supplemented by our
GBP35m revolving credit facility and GBP10m accordion.
We are confident in the momentum being built in the business and
this is supported by an increase in order intake over the period of
15%, with a strong pipeline underpinning our confidence in the
medium term.
The markets in which we operate have been the subject of much
recent discussion, particularly around Planning and the ongoing
trend in Local Government for consolidation into larger
authorities. Whilst many of the well trailed Planning Reform
activities have not transpired to date, the continued push for
improvements in citizen engagement and the better use of data in
property and infrastructure development strategies are encouraging.
These trends, along with the continuing need for simplicity and
cost savings using advanced technology solutions lead us to believe
there will continue to be good opportunities for the business over
the longer term. During the period we have also seen some good
contract wins in the EIM business, which will be realised in the
second half of the year.
We have spoken of our strategy to supplement our existing market
offerings with further targeted acquisitions, and I am pleased that
the three acquisitions we made last year have integrated so well
with the business. We have more to come from enhancing our combined
offerings for clients, but we have made strong progress to date.
Since the acquisition of Idox Cloud in 2019, we have generated
revenue derived from the areas related to our regulated offerings
of over GBP7.5m and this bodes well for the companies we were able
to add to the Group last year.
We have increased our focus on further acquisitions and continue
to look for accretive, synergistic opportunities that support the
long-term focus on software and which complement the existing
portfolio. We are confident that there are a range of opportunities
that fit the key criteria we have defined, and we look forward to
adding further assets in due course.
During the reporting period we have undertaken work to report
our progress in matters relating to ESG and enhanced our reporting
on matters relating to diversity, equality and inclusivity. In each
of these areas our reporting is now illustrative of the attention
the management team place upon these matters and the culture within
the business that seeks to ensure that all stakeholders, foremost
amongst these our employees, can be proud of Idox work in this
area. The Chief Executive's statement includes further information
on our ESG related activities.
Dividend
As previously announced, the Group paid a dividend of 0.4p per
share in April 2022 in respect of the year ending 31 October 2021.
Our current policy is to only declare a final dividend and
therefore there is no interim dividend in respect of H1 FY22 (H1
FY21: GBPNil). We will keep the level of future dividends under
review in consideration of our financial position and our
confidence in the future.
Board
During the reporting period, Rob Grubb resigned his Board
position as Chief Financial Officer and took up a role as M&A
Director for the Group reporting to the CEO, David Meaden. He was
succeeded by Anoop Kang who was appointed to the Board as CFO on 16
March 2022, having previously held a number of senior finance
roles, including CFO, in a range of well-known companies.
Summary
The Group has made credible progress with its strategy during
the period, building on the transformation achieved previously.
Idox is now a pure software Group and is well positioned to
progress further with the financial resources at its disposal. The
business continues to perform well and in line with the Board's
expectations.
Christopher Stone
Chair of the Board
Chief Executive's statement
Building momentum
Our four pillars of Revenue expansion, Margin enhancement,
Simplification and Communication continue to be the platform on
which we build and operate the business. I am pleased to report on
another period of strong performance as we continued to focus on
software businesses that deliver value to customers, and which
allow Idox to maintain long term relationships through our proven
ability to manage complex operational, legislative, and regulatory
issues.
The three acquisitions made in the second half of FY21 (Aligned
Assets, thinkWhere & exeGesIS) strengthen our position in the
area of Planning Technology and further expanded our capabilities
in Address Management and particularly in Geo-Spatial solutions and
services. These acquisitions are now fully integrated within our
sales and operational delivery teams, and we are already seeing
benefits from our combined propositions as well as opportunities to
develop further into near adjacent markets.
We are in a strong financial position to add further customers,
technology, and recurring income through carefully selected
M&A, further extending Idox's position in markets where it is
noted for its expertise and insight.
Strong progress
During this reporting period we have seen growth in Group
revenues for our continuing operations of 7%, with accompanying
adjusted EBITDA improving by 8% from GBP10.1m to GBP11.0m.
Following strong cash generation, we have moved from a net debt
position at 31 October 2021 of GBP8.1m to a net debt position of
GBP3.8m.
As our focus has now shifted into our 'fly phase', and given our
strong operational cadence and financial position, we are well
placed for growth in our software operations and have established a
solid position from which to add compatible bolt on acquisitions to
our portfolio of offerings.
The 'Four Pillars' programme
Revenue expansion
The Chair of the Board referenced the unsettling economic
conditions caused by the war in Ukraine and the lingering effects
of the pandemic. During the period we demonstrated high resilience
as a business and our core areas performed well. Our strong market
positions have allowed us to continue to sell more to existing
clients as we meet their needs, as well as adding new client
accounts. Performance overall has been bolstered by the
transformational activities we have undertaken that have led to
better sales execution and improved integration across the Group,
which in turn have delivered consistent margins and improved
bottom-line performance.
Order intake across the Group for the six months ended 30 April
2022 continued to grow, helping to support the in-year revenue
growth and build the future orderbook. In the period we secured
c.GBP40m of total contract value, increasing by 15% over the same
period last year.
Sales order intake in local government continued to rise, up 13%
on the same period; new wins in H1 FY21 included Rother &
Wealden District Council, Dartmoor National Park Authority and
Belfast City Council, choosing to implement the Idox Cloud
Solution. The Idox Cloud business continued to enjoy good growth in
H1 FY22 as planned, with revenues up 7%, whilst its recurring
revenue was up 11% on the same period last year.
In Elections, we saw a very busy first half of the year. A
combination of UK local elections, an election in Malta and the
completion of a number of project deliverables for the Scottish
eCount contract resulted in revenues up 17% when compared to the
same period in FY21.
Health revenues also increased 9% on the comparable period with
consistent recurring revenue and new sales from our sexual health
products. Sales orders were also up in the period, although we
still believe customers have continued to focus their efforts on
managing the after effects of the Covid-19 pandemic.
In the Grants subscription business incorporating GrantFinder
& ResearchConnect, our new product UI (launched last year) has
been welcomed by the market. Revenues were up in the period 6% and
sales order intake was also up over 10% in the period. We also
continued support for Charities and organisations with incomes of
less than GBP30,000 through the "My Funding Central" solution,
providing free access to grants and funding information to over
3,000 subscribers following the withdrawal of these services by the
National Council Voluntary Organisation.
New business sales in EIM were supported by significant new
FusionLive sales including Lummus Technologies and Transalta,
supporting growth in the markets of Renewables and Construction.
Revenues were down in EIM as the business was affected by
uncertainty in some of its markets largely due to the impact of the
global economy and the war in Ukraine.
Margin enhancement
During the period we have substantially grown our operations in
India, expanding our operational footprint to include the areas of
HR, Finance and Professional Services as well as broadening our
Development Services there. We see scope for further expansion
throughout the rest of this year and beyond.
Development teams have been successfully restructured, our
technology footprints have been consolidated where possible and we
have improved resource sharing across our teams. Cost savings and
efficiencies driven through data centre consolidation and greater
sharing of skills and capabilities across the software and
professional services teams continued to take effect.
Overall, these changes and investments are expected to enhance
our long-term margins.
Simplification
Stratification of the sales teams has provided a greater focus
on communication, renewals and the customer experience and
continues to positively impact customer attrition and the length of
contracts.
Continued investment in our internal processes, systems, and the
integration of data across sales, customer services, professional
services and finance ensures that we have consistent customer
information, improving all aspects of our operational
performance.
Professional Services utilisation continues to improve, and
significant work has been delivered to improve and simplify the
process of data migration between Idox solutions, thus making the
transition of on-premise legacy platforms to our latest cloud
provisioned services shorter and more cost effective for
customers.
Communication
Regular and open communication with all colleagues across the
business is a strategic focus for the Group and is delivered
through a number of channels.
We continue to provide regular updates through our CEO
broadcasts where various members of the management team participate
to provide a broad range of insights and inputs to the sessions,
including an open Q&A provision for all colleagues to
participate. Our colleagues across the business are highly engaged
and participation levels demonstrate this.
Personally, conducting final conversations with prospective new
team members enables me to outline how we operate and work at Idox,
what they can expect from us and we in turn expect from them. This
ensures that we have a well communicated and understood culture and
our ambitions for the business and the opportunity for individuals
to have meaningful careers in a unique company can be fully aligned
from the outset.
Responsible Idox
Conducting business responsibly is core to Idox's business model
and long-term strategic goals. The Board recognises the importance
of our environmental and societal responsibilities in defining and
growing the value of our services and solutions and in building
lasting commercial relationships across the industries and
communities in which we operate. Our commitment is focused in four
areas: our people, our communities, our environment, and our
organisational responsibilities. Each of these focus areas
addresses relevant United Nations Sustainable Development
Goals.
In FY21 we formed an ESG steering committee, with the core
responsibility of understanding and monitoring how our business
practices are sustainable in environmental and social terms, as
well as ensuring Idox is well governed. This committee has
sponsored further initiatives during the first half of FY22 with
particular focus on Diversity, Equality and Inclusivity, most
notably with the 'Dare to be Different' survey which was completed
during the period. Response rate from employees was extremely high,
demonstrating the levels of commitment our team have in celebrating
our successes whilst also identifying further opportunities for
improvement. Our most recent initiative is the introduction of
'Employee Lounges' - small virtual meetings to discuss how these
improvements should be made in the most effective way.
Idox recognises the importance of environmental protection and
is committed to operating its business responsibly by operating an
Environmental Management System accredited to BS EN ISO 14001:2015,
participating in the Energy Saving Opportunities Scheme ('ESOS'),
and meeting the requirements of the Streamlined Energy and Carbon
Reporting ('SECR') regulations. FY21 saw the introduction of
enhanced reporting of our Scope 1, 2 and 3 emissions disclosures
within the Task Force on Climate-related Financial Disclosures
('TCFD') framework and in the first half of FY22 we have continued
to drive initiatives such as moving towards electric vehicles for
our service operations and maintaining disciplines on avoiding
unnecessary travel as Covid restrictions have been removed.
Employees continue to use our community days scheme to support
good causes in their local communities and the payroll giving
scheme to maximise the impact of their contributions. The workplace
wellbeing sessions also continue to be very well attended and
appreciated by members of the Idox Team.
Outlook
We continue to build momentum with a sharp focus on growing
revenues within an optimised operational structure; this will
support good margin performance as we progress through our 'fly
phase' which we believe will drive value for all our
stakeholders.
We are making good progress and our strategy remains unchanged.
We are clear in our view that software provided in the cloud and /
or provisioned through our data centre services across each of our
business areas is a strategic necessity to service the market needs
whilst, in turn, growing our recurring revenue and we continue to
invest across the business to facilitate this.
Our good cash generation provides a solid foundation from which
to invest in organic growth whilst initiating complimentary growth
through the acquisition of strategic targets that add to our
portfolio of offerings. Overall, our current full year financial
performance is expected to be in line with Board expectations
reflecting our strong order book and consistent operational
execution.
David Meaden
Chief Executive Officer
Chief Financial Officer's review
Financial review
The first six months of 2022 have built upon the changes
implemented in FY21. We have successfully integrated Aligned Assets
and thinkWhere into the Group, with exeGesIS substantially
progressed and planned to complete in the second half of the year.
The acquisitions have proven to be earnings enhancing as
anticipated, contributing towards our 7% increase in continuing
revenue to GBP33.2m (H1 FY21: GBP31.1m) and our 8% increase in
adjusted EBITDA to GBP11.0m (H1 FY21: GBP10.1m).
The Idox Content business was classified as discontinued
following its disposal in FY21.
The following table sets out the Revenue and Adjusted EBITDA for
each of the Group's segments.
H1 FY22 H1 FY21 Variance
----------------
GBP000 GBP000 GBP000 %
Revenue
- Public Sector Software 29,652 26,982 2,670 10%
- Engineering Information
Management 3,554 4,148 (594) (14%)
-------- ---------- --------
Idox Software 33,206 31,130 2,076 7%
Idox Content (discontinued) - 3,897 (3,897) N/A
-------- ---------- --------
Total 33,206 35,027 (1,821) (5%)
Revenue Split
- Public Sector Software 89% 77%
- Engineering Information
Management 11% 12%
-------- ----------
- Idox Software 100% 89%
- Idox Content (discontinued) - 11%
Adjusted EBITDA (1)
- Public Sector Software 10,679 9,420 1,259 13%
- Engineering Information
Management 311 719 (408) (57%)
-------- ---------- --------
Idox Software 10,990 10,139 851 8%
Idox Content (discontinued) - 276 (276) N/A
-------- ---------- --------
Total 10,990 10,415 575 6%
Adjusted EBITDA Margin
Split
- Public Sector Software 36% 35%
- Engineering Information
Management 9% 17%
-------- ----------
- Idox Software 33% 33%
- Idox Content (discontinued) - 7%
-------- ----------
- Total 33% 30%
(1) Adjusted EBITDA is defined as earnings before amortisation,
depreciation, restructuring, acquisition costs, impairment,
financing costs and share option costs. See note 11 for
reconciliations of the alternative performance measures.
Public Sector Software ('PSS') and Engineering Information
Management ('EIM')
PSS delivered revenues of GBP29.7m, an improvement of 10% on the
prior year, while the revenues in EIM have decreased to GBP3.6m in
the period. Within PSS, the acquisitions made in FY21, contributed
GBP3.2m of revenue. On a 'like for like' basis the Group delivered
GBP30.0m of revenue, slightly down on the prior period.
H1 FY22 H1 FY21 Variance
---------------
GBP000 GBP000 GBP000 %
Idox Software Revenues
- Recurring (PSS) 16,866 14,508 2,358 16%
- Recurring (EIM) 2,964 3,117 (153) (5%)
-------- -------- ------- ------
19,830 17,625 2,205 13%
- Non-Recurring (PSS) 12,786 12,474 312 3%
- Non-Recurring (EIM) 590 1,031 (441) (43%)
-------- -------- ------- ------
13,376 13,505 (129) (1%)
33,206 31,130 2,076 7%
-------- -------- ------- ------
- Recurring (1) 60% 57%
- Non-Recurring (2) 40% 43%
(1) Recurring revenue is defined as revenues associated with
access to a specific ongoing service, with invoicing that typically
recurs on an annual basis and underpinned by either a multi-year or
rolling contract. These services include Support & Maintenance,
SaaS fees, Hosting services, and some Managed service arrangements
which involve a fixed fee irrespective of consumption.
(2) Non-recurring revenue is defined as revenues without any
formal commitment from the customer to recur on an annual
basis.
Total recurring revenue increased by 13% in the period to
GBP19.8m and now accounts for 60% of the Group's total revenue (H1
FY21: 57%). Recurring revenues in PSS have increased 16% to
GBP16.9m and have been positively impacted by the acquisitions in
the second half of FY21. In EIM recurring revenues have decreased
by 5% to GBP3.0m, impacted by certain contracts which ended in FY21
and were not renewed and a continuation of uncertain market
conditions.
Non-recurring revenues have remained stable at GBP13.4m for the
period and account for 40% of the Group's revenue. A reduction of
GBP0.4m in EIM has been offset by improvements in PSS, particularly
in the Elections part of the business.
The Group's order intake for the period was up 15% on last year
to c.GBP40m. Furthermore, the average tenure of new contracts has
increased from 20 months to 22 months, as the Group focuses on
transitioning existing customer relationships to longer term
arrangements, this includes contract wins in both PSS and EIM. The
orderbook for professional services ended the period at GBP8.9m,
down from GBP9.8m at 31 October 2021 and as a result of the planned
unwind of Elections contracts.
Adjusted EBITDA increased by 8% to GBP11.0m (H1 FY21: GBP10.1m),
delivering a stable EBITDA margin of 33% (H1 FY21: 33%). The
improvement in adjusted EBITDA benefitted from the FY21
acquisitions but was partially offset by reduced revenues in EIM
and the phasing of certain contracts in PSS to the second half of
the year.
We continue with our efforts to improve efficiencies through
marginal gains across our sales, development, professional services
and support activities, and leverage our common resources to drive
higher margins through improved economies of scale.
Profit / (Loss) Before Taxation
The following table provides a reconciliation between adjusted
EBITDA and statutory profit before taxation for continuing
operations.
H1 FY22 H1 FY21 Variance
---------------
GBP000 GBP000 GBP000 %
Adjusted EBITDA 10,990 10,139 851 8%
Depreciation & Amortisation (5,328) (5,043) (285) 6%
Restructuring costs (119) (160) 41 (26%)
Acquisition costs (11) (6) (5) 83%
Financing costs (30) (29) (1) 3%
Share option costs (1,249) (784) (465) 59%
Net finance costs (651) (462) (189) 41%
-------- ------------
Profit before taxation 3,602 3,655 (53) (1%)
-------- ------------ -------
The reported profit before tax for continuing operations was
GBP3,602,000 (H1 FY21: GBP3,655,000).
Restructuring costs are analysed as follows:
H1 FY22 H1 FY21 Variance
----------------
GBP000 GBP000 GBP000 %
Corporate restructuring 109 - 109 100%
Litigation - (11) 11 100%
Property 10 - 10 100%
Take over approach - 171 (171) (100%)
-------- --------
Total restructuring costs 119 160 (41) (26%)
-------- -------- -------
Acquisition costs of GBP11,000 (H1 FY21: GBP6,000) relates to
the final settlements in relation to the acquisition of Aligned
Assets, thinkWhere and exeGesIS in FY21. The prior year comparative
is in relation to Idox Cloud (formerly Tascomi) in August 2019.
Financing costs of GBP30,000 (H1 FY21: GBP29,000) relate to
professional fees incurred as part of the ongoing bank facility
agreement.
Share option costs of GBP1.2m (H1 FY21: GBP0.8m) relate to the
accounting charge for awards in the current and prior years under
the Group's Long-term Incentive Plan.
Net finance costs have increased to GBP0.7m (H1 FY21: GBP0.5m)
as a result of the foreign exchange gain on the revaluation of the
euro denominated bond being lower than in the comparative period
and less interest being payable in respect of the Group's banking
facilities.
The Group capitalised GBP3.1m of development costs during the
period (H1 FY21: GBP2.2m). GBP0.7m related to the FY21 acquisitions
and GBP2.4m in respect of the Group's legacy products. The Group
has a number of products which are all at differing stages of their
lifecycle. These platforms require continued investment to remain
operational and current. For example, enhancements include
technical refreshes, functional changes and investment needed to
ensure continued operability.
Taxation
The effective tax rate (ETR) for the period was 17% (H1 FY21:
8%) for total operations. The ETR for the period for continuing
operations was 15% (H1 FY21: 18%). On an adjusted basis the Group's
ETR was 20% (H1 FY21: 20%).
The main factors for the reduction in the volatility in the ETR
on the profit before tax position was the disposals in FY21 which
resulted in income not subject to tax, meaning permanent and other
differences giving rise to ETR effects were proportionately lower
in the current period. The difference between the statutory rate of
19% and the adjusted ETR of 20% is due to certain disallowables,
the impact of overseas tax rates and international losses arising
in the period and not recognised.
There are substantial carried-forward losses not recognised for
deferred tax purposes to date, owing to adoption of a prudent loss
recognition position. The gross value of these losses not
recognised to date totals GBP12m, split across Malta (GBP9.1m), the
UK (GBP0.6m), and France (GBP2.3m). The Board is hopeful that the
Group will benefit from the unrecognised tax losses in the UK and
France in the future and these will be recognised at the point
where utilisation becomes more certain.
Earnings per share and dividends
Basic earnings per share for continuing operations improved 3%
to 0.70p (H1 FY21: 0.68p) as a result of the Group reporting a
larger profit after tax compared to that in H1 FY21. Diluted
earnings per share for continuing operations improved 1% to 0.68p
(H1 FY21: 0.67p).
Adjusted basic earnings per share for continuing operations
increased 7% to 1.24p (H1 FY21: 1.16p). Adjusted diluted earnings
per share for continuing operations increased 7% to 1.21p (H1 FY21:
1.13p).
In line with FY21 the Board does not propose an interim dividend
in respect of the six months ended 30 April 2022. We will keep the
level of future dividends under review in consideration of our
financial position and our confidence in the future.
Balance sheet and cashflow
The Group's net assets have increased to GBP63.1m compared to
GBP60.8m at 31 October 2021. The constituent movements are detailed
in the Group's consolidated Statement of Changes in Equity: which
are summarised as follows:
6 months
to
30 April
2022
GBP000
Total Equity as per FY21 Financial Report 60,810
Share option movements 1,221
Equity dividends paid (1,784)
Profit for the period 2,508
Exchange gains on translation of foreign operations 310
Total Equity as per H1 FY22 Financial Report 63,065
----------
The Group continued to have good cash generation in the period.
Cash generated from operating activities before taxation as a
percentage of Adjusted EBITDA for total operations was 122% (H1
FY21: 169%). The reduction in the conversion rate is primarily due
to the settlement of VAT deferrals and exceptional cash costs in H1
FY22 and the timing of certain other creditor payments falling into
the second half of FY21.
H1 FY22 H1 FY21
GBP000 GBP000
Net cashflow from operating
activities after taxation 11,127 17,775
Capex (3,588) (3,097)
Lease payments (509) (678)
Free cashflow 7,030 14,000
-------- --------
The Group ended the period with net debt of GBP3.8m (H1 FY21:
net cash of GBP7.6m), representing a 54% reduction from the net
debt position of GBP8.1m at 31 October 2021. The net cash position
in the prior year reflected the net cash inflow of GBP10.7m from
the disposal of our Content business, which was subsequently
reinvested in the acquisitions in the second half of the year. Net
debt comprised cash of GBP21.6m less bank borrowings of GBP14.5m
and the Maltese listed bond of GBP10.9m.
In October 2021 the Group extended its revolving credit facility
of GBP35m and GBP10m accordion with the Royal Bank of Scotland plc,
Silicon Valley Bank and Santander UK plc for an additional 18
months, to June 2024. The Group also transitioned from LIBOR to
SONIA at this point.
The Group has carefully assessed the ongoing impact of the
Covid-19 pandemic on the business and on our customers. Idox is
fundamentally resilient due to the Group's high recurring revenue
base, its focus on public sector markets and the high proportion of
staff that routinely work from home. The Group retains significant
liquidity with cash and available committed bank facilities and has
strong headroom against financial covenants. For this reason, the
Directors continue to adopt the going concern basis in preparing
the financial statements.
Anoop Kang
Chief Financial Officer
6 months 12 months
to to
6 months
to 30 April 30 April 31 October
2022 2021* 2021
Note (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Continuing operations
Revenue 3 33,206 31,130 62,185
Cost of sales (8,389) (8,467) (17,130)
--------------- -------------- -------------
Gross profit 24,817 22,663 45,055
Administrative expenses (20,564) (18,546) (37,415)
--------------- --------------
Operating profit 4,253 4,117 7,640
Analysed as:
Adjusted EBITDA 11 10,990 10,139 19,519
Depreciation & Amortisation (5,328) (5,043) (10,204)
Restructuring costs (119) (160) 90
Acquisition costs (11) (6) 134
Financing costs (30) (29) (110)
Share option costs (1,249) (784) (1,789)
----------------------------------------------- ------ --------------- -------------- -------------
Finance income 219 801 818
Finance costs (870) (1,263) (1,190)
Profit before taxation 3,602 3,655 7,268
Income tax charge 5 (527) (650) (1,237)
Profit for the period from continuing
operations 3,075 3,005 6,031
Discontinued operations
(Loss) / profit for the year from
discontinued operations 6 (567) 4,284 5,918
Profit for the period attributable
to the owners of the parent 2,508 7,289 11,949
Other comprehensive income / (loss)
for the period
Items that will be reclassified subsequently
to profit or loss:
Exchange movement on translation of
foreign operations net of tax 310 401 (108)
Other comprehensive income / (loss)
for the period, net of tax 310 401 (108)
--------------- -------------- -------------
Total comprehensive income for the
period attributable to owners of the
parent 2,818 7,690 11,841
=============== ============== =============
Earnings per share attributable to owners of
the parent during the period
From continuing operations
Basic 7 0.70p 0.68p 1.37p
Diluted 7 0.68p 0.67p 1.34p
From continuing and discontinued operations
Basic 7 0.57p 1.66p 2.71p
Diluted 7 0.56p 1.62p 2.65p
Consolidated interim statement of comprehensive income
*The comparatives have been re-presented for a more appropriate
reallocation between cost of sales and administrative expenses as
result of the Content business being reclassified as discontinued
operations in the prior period. There has been no change to the
overall results.
The accompanying notes form an integral part of these financial
statements.
At 30 April
At 31 October
2022 2021
At 30 April
Note (unaudited) 2021 (unaudited) (audited)
GBP000 GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 1,341 1,179 1,307
Intangible assets 8 91,530 71,386 92,025
Right-of-use-assets 2,000 2,066 2,363
Deferred tax assets 2,133 1,450 2,623
Total non-current assets 97,004 76,081 98,318
---------------
Current assets
Trade and other receivables 20,966 20,088 16,968
Current tax receivable 725 - -
Cash and cash equivalents 21,560 29,159 18,283
Total current assets 43,251 49,247 35,251
-------------- ------------------ ---------------
Total assets 140,255 125,328 133,569
-------------- ------------------ ---------------
Liabilities
Current liabilities
Trade and other payables 8,404 7,372 8,075
Deferred consideration 2,691 - 2,070
Current tax payable - 126 1,399
Other liabilities 30,928 33,388 23,547
Provisions 853 1,967 1,433
Lease liabilities 563 701 727
Total current liabilities 43,439 43,554 37,251
-------------- ------------------ ---------------
Non-current liabilities
Deferred tax liabilities 6,256 3,445 5,579
Deferred consideration - - 841
Lease liabilities 1,454 1,485 1,747
Other liabilities 727 934 949
Bonds in issue 10,848 11,364 10,998
Borrowings 14,466 10,207 15,394
-------------- ------------------ ---------------
Total non-current liabilities 33,751 27,435 35,508
-------------- ------------------ ---------------
Total liabilities 77,190 70,989 72,759
-------------- ------------------ ---------------
Net assets 63,065 54,339 60,810
============== ================== ===============
Equity
Called up share capital 4,511 4,463 4,469
Capital redemption reserve 1,112 1,112 1,112
Share premium account 41,556 41,466 41,556
Treasury reserve (594) (594) (594)
Share option reserve 3,673 3,068 3,962
Other reserves 8,789 7,528 8,789
ESOP trust (445) (379) (417)
Foreign currency translation
reserve 121 320 (189)
Retained earnings / (accumulated
losses) 4,342 (2,645) 2,122
-------------- ------------------ ---------------
Equity attributable to the
owners of the parent 63,065 54,339 60,810
============== ================== ===============
Consolidated interim balance sheet
The financial statements were approved by the Board of Directors
and authorised for issue and are signed on its behalf by:
David Meaden Anoop Kang
Chief Executive Officer Chief Financial Officer
The accompanying notes form an integral part of these financial
statements.
Retained
Called Foreign earnings
up Capital Share Share currency /
share redemption premium Treasury options Other ESOP translation (accumu-lated
capital reserve account reserve reserve reserves trust reserve losses) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
November 2020
(audited) 4,450 1,112 41,356 (621) 2,618 7,528 (373) (161) (8,951) 46,958
Issue of share
capital 13 - 110 - - - - - - 123
Share option
charge - - - - 893 - - - - 893
Exercise /
lapses
of share
options - - - 27 (443) - - - 428 12
ESOP trust - - - - - - (6) - - (6)
Equity dividends
paid - - - - - - - - (1,331) (1,331)
Transactions
with owners and
non-controlling
interests 13 - 110 27 450 - (6) - (903) (309)
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
Profit for the
period - - - - - - - - 7,289 7,289
Other
comprehensive
income
Recycled
exchange
movements on
disposal
of subsidiaries - - - - - - - 80 (80) -
Exchange
movement
on translation
of foreign
operations - - - - - - - 401 - 401
Total
comprehensive
loss for the
period - - - - - - - 481 7,209 7,690
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
At 30 April 2021
(unaudited) 4,463 1,112 41,466 (594) 3,068 7,528 (379) 320 (2,645) 54,339
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
Issue of share
capital 6 - 90 - - - - - - 96
Share options
charge - - - - 1,001 - - - - 1,001
Exercise /
lapses
of share
options - - - - (107) - - - 107 -
ESOP trust - - - - - - (38) - - (38)
Fair value of
deferred
consideration
shares on
purchase
of subsidiary - - - - - 1,261 - - - 1,261
Transactions
with owners 6 - 90 - 894 1,261 (38) - 107 2,320
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
Profit for the
period - - - - - - - - 4,660 4,660
Other
comprehensive
income
Exchange
movement
on translation
of foreign
operations - - - - - - - (509) - (509)
Total
comprehensive
profit for the
period - - - - - - - (509) 4,660 4,151
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
Balance at 31
October 2021
(audited) 4,469 1,112 41,556 (594) 3,962 8,789 (417) (189) 2,122 60,810
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
Issue of share
capital 42 - - - - - - - - 42
Share option
charge - - - - 1,207 - - - - 1,207
Exercise /
lapses
of share
options - - - - (1,496) - - - 1,496 -
ESOP trust - - - - - - (28) - - (28)
Equity dividends
paid - - - - - - - - (1,784) (1,784)
Transactions
with owners 42 - - - (289) - (28) - (288) (563)
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
Profit for the
period - - - - - - - - 2,508 2,508
Other
comprehensive
loss
Exchange
movement
on translation
of foreign
operations - - - - - - - 310 - 310
Total
comprehensive
profit for the
period - - - - - - - 310 2,508 2,818
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
At 30 April 2022
(unaudited) 4,511 1,112 41,556 (594) 3,673 8,789 (445) 121 4,342 63,065
--------- ------------ -------- ---------- --------- ---------- -------- ------------ -------------- --------
Consolidated interim statement of changes in equity
The accompanying notes form an integral part of these financial
statements.
Consolidated interim cash flow statement
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2022 2021 (unaudited) 2021 (audited)
Note (unaudited)
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit for the period before
taxation 3,035 7,935 13,186
Adjustments for:
Depreciation of property, plant
and equipment 371 467 801
Depreciation of right-of-use
assets 363 610 1,021
Amortisation of intangible assets 4,594 4,420 8,835
Loss / (gain) on disposal of
subsidiary 6 567 (4,592) (6,679)
Finance income (199) (801) (800)
Finance costs 810 1,205 1,060
Debt issue costs amortisation 60 73 144
Research and development tax
credit (161) (100) (267)
Share option costs 1,249 903 1,908
Movement in receivables (4,428) (2,879) 3,086
Movement in payables 7,177 10,386 (5,947)
--------------- -------------------- ------------------
Cash generated by operations 13,438 17,627 16,348
(Tax paid) / tax refunded (2,311) 148 206
Net cash from operating activities 11,127 17,775 16,554
Cash flows from investing activities
Acquisition of subsidiaries (651) - (10,530)
Disposal of subsidiaries (148) 10,730 10,669
Gain on sale of property, plant
and equipment 11 - -
Purchase of property, plant
and equipment (404) (790) (1,110)
Purchase of intangible assets (3,184) (2,307) (4,637)
Finance income 37 19 66
------------------
Net cash from / (used in) investing
activities (4,339) 7,652 (5,542)
Cash flows from financing activities
Interest paid (227) (363) (967)
New loans 2,500 5,000 15,600
Loan related costs (76) - (292)
Loan repayments (3,600) (30,000) (35,000)
Principal lease payments (509) (678) (1,154)
Equity dividends paid (1,784) (1,331) (1,331)
(Purchase) / issue of own shares (51) 69 64
--------------- --------------------
Net cash outflows from financing
activities (3,747) (27,303) (23,080)
Net movement in cash and cash
equivalents 3,041 (1,876) (12,068)
Cash and cash equivalents at
the beginning of the period 18,283 30,812 30,812
Exchange gains / (losses) on cash
and cash equivalents 236 223 (461)
--------------- -------------------- ------------------
Cash and cash equivalents at the
end of the period 21,560 29,159 18,283
=============== ==================== ==================
The accompanying accounting policies and notes form an integral
part of these financial statements.
Notes to the interim accounts
1 General information
Idox plc is a leading supplier of software and services for the
management of Local Government and other organisations. The Company
is a public limited company, limited by shares, which is listed on
the AIM Market of the London Stock Exchange and is incorporated and
domiciled in the UK. The address of its registered office is 2nd
Floor, 1310 Waterside, Arlington Business Park, Theale, Reading,
RG7 4SA. The registered number of the Company is 03984070. There is
no ultimate controlling party.
The financial statements are prepared in pounds sterling .
2 Basis of preparation
The financial information for the period ended 30 April 2022 set
out in this interim report does not constitute statutory accounts
as defined in Section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 October 2021
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified.
The interim financial information has been prepared using the
same accounting policies and estimation techniques as will be
adopted in the Group financial statements for the year ending 31
October 2022. The Group financial statements for the year ended 31
October 2021 were prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards
(IFRS) adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union. They were also prepared in
accordance with International Financial Reporting Standards as
issued by the IASB. These interim financial statements have been
prepared on a consistent basis and format. The Group has not
applied IAS 34 'Interim Financial Reporting', which is not
mandatory for AIM companies, in the preparation of these interim
financial statements.
Going concern
The Directors, having made suitable enquiries and analysis of
the accounts, consider that the Group has adequate resources to
continue in business for the foreseeable future. In making this
assessment, the Directors have considered the Group's budget, cash
flow forecasts, available banking facility with appropriate
headroom in facilities and financial covenants, and levels of
recurring revenue.
In December 2019 the Group had refinanced with the Royal Bank of
Scotland plc, Silicon Valley Bank and Santander UK plc. The
facilities, which comprise a revolving credit facility of
GBP35,000,000, were extended in October 2021 and are committed
until June 2024.
Idox along with most companies has been impacted by the Covid-19
pandemic, however the impact on our Group has in the main been
limited to the initial disruption of the early stages of the
emerging challenges in 2020, including restrictions on physical
movement. We have largely seen our operations return to their
pre-Covid 19 pandemic levels across our Group.
We remain cautious in respect of the ongoing impact of the
Covid-19 pandemic and associated restrictions but are confident we
are fundamentally resilient due to the Group's high recurring
revenue base, its focus on public sector markets and the high
proportion of staff that routinely work from home. The Group
retains significant liquidity with cash and available committed
bank facilities and has strong headroom against financial
covenants.
On the basis of the above considerations, the Directors have a
reasonable expectation that the Group will have adequate resources
to continue in business for the foreseeable future and therefore
continue to adopt the going concern basis in preparing the interim
financial statements.
3 Segmental analysis
During the period ended 30 April 2022, the Group was organised
into two operating segments which are detailed below.
Financial information is reported to the chief operating
decision maker, which comprises the Chief Executive Officer and the
Chief Financial Officer, monthly with revenue and operating profits
split by business unit. Each business unit is deemed an operating
segment as each offers different products and services.
-- Idox Software: Public Sector Software (PSS) - delivering
specialist information management solutions and services to the
public sector.
-- Idox Software: Engineering Information Management (EIM) -
delivering engineering document management and control solutions to
asset intensive industry sectors.
During the six months ended 30 April 2021 the Group disposed of
its Continental Compliance operations and its Netherlands Grants
Consultancy operations, which together comprised the Idox Content
segment. As Idox Content was a separately identifiable division the
results for the period ended 30 April 2022 and comparative period
have been classified as a discontinued operation.
Segment revenue comprises sales to external customers and
excludes gains arising on the disposal of assets and finance
income. Segment profit reported to the Board represents the profit
earned by each segment before the allocation of taxation, Group
interest payments and Group acquisition costs. The assets and
liabilities of the Group are not reviewed by the chief operating
decision maker on a segment basis. The Group does not place
reliance on any specific customer and has no individual customer
that generates 10% or more of its total Group revenue.
The segment results for the six months to 30 April 2022
were:
Continuing Discontinued
operations operations
PSS EIM total Content Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 29,652 3,554 33,206 - 33,206
-------- -------- ------------ ------------- --------
Adjusted EBITDA (note
11) 10,679 311 10,990 - 10,990
-------- -------- ------------ ------------- --------
Depreciation & Amortisation (4,698) (630) (5,328) - (5,328)
Restructuring costs (44) (75) (119) - (119)
Acquisition costs (11) - (11) - (11)
Share option costs (1,060) (189) (1,249) - (1,249)
-------- -------- ------------ ------------- --------
Segment operating profit 4,866 (583) 4,283 - 4,283
-------- -------- ------------ ------------- --------
Financing costs (30) - (30)
Operating profit 4,253 - 4,253
------------ ------------- --------
Loss from sale of discontinued
operations - (567) (567)
Finance income 219 - 219
Finance costs (870) - (870)
------------ ------------- --------
Profit before tax 3,602 (567) 3,035
------------ ------------- --------
The corporate recharge to the business unit is allocated on a
head count basis.
The segment results for the six months to 30 April 2021
were:
Continuing Discontinued
operations operations
PSS EIM total Content Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 26,982 4,148 31,130 3,897 35,027
-------- -------- ------------ ------------- --------
Adjusted EBITDA (note
11) 9,420 719 10,139 276 10,415
-------- -------- ------------ ------------- --------
Depreciation & Amortisation (4,778) (265) (5,043) (454) (5,497)
Restructuring costs (127) (33) (160) - (160)
Acquisition costs (6) - (6) - (6)
Share option costs (771) (13) (784) (119) (903)
-------- -------- ------------ ------------- --------
Segment operating profit
/ (loss) 3,738 408 4,146 (297) 3,849
-------- -------- ------------ ------------- --------
Financing costs (29) - (29)
Operating profit 4,117 (297) 3,820
Gain from sale of discontinued
operations - 4,592 4,592
Finance income 801 - 801
Finance costs (1,263) (15) (1,278)
------------ ------------- --------
Profit before tax 3,655 4,280 7,935
------------ ------------- --------
The segment revenues by geographic location were as follows:
Continuing Discontinued Total Group
GBP000 GBP000 GBP000
H1 FY22: Revenues from external
customers:
United Kingdom 29,546 - 29,546
North America 2,008 - 2,008
Europe 1,407 - 1,407
Rest of World 245 - 245
----------- ------------- ------------
33,206 - 33,206
=========== ============= ============
Continuing Discontinued Total Group
GBP000 GBP000 GBP000
H1 FY21: Revenues from external
customers:
United Kingdom 26,679 46 26,725
North America 2,836 27 2,863
Europe 1,149 3,824 4,973
Rest of World 466 - 466
----------- ------------- ------------
31,130 3,897 35,027
=========== ============= ============
4 Dividends
During the period a dividend was paid in respect of the year
ended 31 October 2021 of 0.4p per ordinary share at a total cost of
GBP1,784,000 (H1 FY21: 0.3p per ordinary share at a total cost of
GBP1,331,000) .
The directors do not propose a dividend in respect of the
interim period ended 30 April 2022 (H1 FY21: GBPNil).
5 Tax on profit on ordinary activities
12 months
to
6 months 6 months 31 October
to to 2021
30 April 30 April
Continuing operations 2022 (unaudited) 2021 (unaudited) (audited)
GBP000 GBP000 GBP000
Current tax
UK corporation tax on profit /
loss for the year 361 1,116 2,406
Foreign tax on overseas companies - 294 145
Under / (over) provision in respect
of prior periods 43 (53) (30)
------------------- ------------------- -------------
Total current tax 404 1,357 2,521
-------------
Deferred tax
Origination and reversal of timing
differences 11 (723) (1,553)
Adjustment for rate change (12) 16 826
Adjustments in respect of prior
periods 124 - (577)
Other - - 20
------------------- ------------------- -------------
Total deferred tax 123 (707) (1,284)
------------------- ------------------- -------------
Total tax charge 527 650 1,237
=================== =================== =============
12 months
to
6 months 6 months 31 October
to to 2021
30 April 30 April
Total operations 2022 (unaudited) 2021 (unaudited) (audited)
GBP000 GBP000 GBP000
Current tax
UK corporation tax on profit /
loss for the year 361 1,136 2,406
Foreign tax on overseas companies - 294 145
Under / (over) provision in respect
of prior periods 43 (88) (30)
------------------- ------------------- -------------
Total current tax 404 1,342 2,521
-------------
Deferred tax
Origination and reversal of timing
differences 11 (712) (1,553)
Adjustment for rate change (12) - 826
Adjustments in respect of prior
periods 124 16 (577)
Other - - 20
------------------- ------------------- -------------
Total deferred tax 123 (696) (1,284)
------------------- ------------------- -------------
Total tax charge 527 646 1,237
=================== =================== =============
Unrelieved trading losses of GBP1,217,000 remain available to
offset against future taxable trading profits (excluding
unrecognised losses of GBP549,249 in the UK and GBP11,480,717
overseas).
6 Discontinued operations
During the six months ended 30 April 2021, the Group received
separate offers to acquire its Continental Compliance operations,
and its Netherlands Grants Consultancy operations. These operations
collectively comprised the Idox Content division of the Group.
These offers were at an acceptable valuation and given the Group's
desire to prioritise capital on its Idox Software operation, these
disposals were completed in the period.
The Continental Compliance operations were disposed on 12 March
2021 and the Netherlands Grants Consultancy operations were
disposed on 6 April 2021. These dates represent the point the
control and legal ownership of these operations passed to the
acquirers.
The results of the discontinued operations, which have been
excluded in the consolidated income statement, were as follows:
12 months
6 months 6 months to
to 30 April to 30 April 31 October
2022 (unaudited) 2021 (unaudited) 2021 (audited)
GBP000 GBP000 GBP000
Revenue - 3,897 3,897
Expenses - (4,209) (4,218)
(Loss) / gain on disposal (567) 4,592 6,239
Profit before tax (567) 4,280 5,918
Attributable tax expense - 4 -
Net (loss) / profit attributable
to discontinued operations (567) 4,284 5,918
================== ================== ================
During the period, Content contributed GBP0.6m (H1 FY21:
GBP0.1m) to the Group's net operating cash flows and contributed
(GBP0.1m) (HY21 H1: GBP10.7m) in respect of investing and financing
activities.
7 Earnings per share
The earnings per share is calculated by reference to the
earnings attributable to ordinary shareholders divided by the
weighted average number of shares in issue during each period, as
follows:
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2022 2021 2021
Continuing operations (unaudited) (unaudited) (audited)
Profit for the period (GBP000) 3,075 3,005 6,031
-------------- -------------- -------------
Basic earnings per share
Weighted average number of shares
in issue 441,605,209 439,472,715 440,376,576
-------------- -------------- -------------
Basic earnings per share 0.70p 0.68p 1.37p
============== ============== =============
Weighted average number of shares
in issue 441,605,209 439,422,715 440,376,576
Add back:
Dilutive share options 10,214,904 9,809,942 10,749,077
Weighted average allotted, called
up and fully paid share capital 451,820,113 449,232,657 451,125,653
-------------- -------------- -------------
Diluted earnings per share
Diluted earnings per share 0.68p 0.67p 1.34p
============== ============== =============
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2022 2021 2021
Adjusted earnings per share (unaudited) (unaudited) (audited)
Adjusted profit for the period (GBP000)
(see note 11) 5 ,483 5,081 10,252
Weighted average number of shares
in issue - basic 441,605,209 439,422,715 440,376,576
Weighted average number of shares
in issue - diluted 451,820,113 449,232,657 451,125,653
Adjusted basic earnings per share 1.24p 1.16p 2.33p
============== ============== =============
Adjusted diluted earnings per share 1.21p 1.13p 2.27p
============== ============== =============
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2022 2021 2021
Total operations (unaudited) (unaudited) (audited)
Profit for the period (GBP000) 2,508 7,289 11,949
-------------- -------------- -------------
Basic earnings per share
Weighted average number of shares
in issue 441,605,209 439,422,715 440,376,576
-------------- -------------- -------------
Basic earnings per share 0.57p 1.66p 2.71p
============== ============== =============
Weighted average number of shares
in issue 441,605,209 439,422,715 440,376,576
Add back:
Dilutive share options 10,214,904 9,809,942 10,749,077
Weighted average allotted, called
up and fully paid share capital 451,820,113 449,232,657 451,125,653
-------------- -------------- -------------
Diluted earnings per share
Diluted earnings per share 0.56p 1.62p 2.65p
============== ============== =============
8 Intangibles
Customer Trade Development
Goodwill relationships names Software costs Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 31 October 2021 50,901 15,228 2,626 10,945 12,325 92,025
Additions - - - 70 3,114 3,184
Fair Value Adjustment 915 - - - - 915
Amortisation - (757) (223) (1,320) (2,294) (4,594)
At 30 April 2022 51,816 14,471 2,403 9,695 13,145 91,530
======== ============== ====== ======== =========== =======
No impairment charge was incurred during H1 FY22 (H1 FY21:
GBPNil).
9 Long-term incentive plan (LTIP)
During the period, 5,462,258 options were granted under the
LTIP.
The Group recognised a total charge of GBP1,249,211 (H1 FY21:
GBP892,622) for equity-settled share-based payment transactions
related to the LTIP during the period. The total cost was in
relation to outstanding share options and share options granted in
the year.
The number of options in the LTIP scheme is as follows:
30 April 30 April 31 October
2022 2021 2021
No. No. No.
Outstanding at the beginning of
the period 15,557,052 12,435,871 12,435,871
Granted 5,462,258 3,387,735 4,800,709
Forfeited - (265,345) (265,345)
Exercised (4,182,312) (999,428) (1,414,183)
-------------------------------------- ------------ ----------- ------------
Outstanding at the end of the period 16,836,998 14,558,833 15,557,052
-------------------------------------- ------------ ----------- ------------
Exercisable at the end of the period 4,722,051 4,941,749 5,301,163
-------------------------------------- ------------ ----------- ------------
10 Post balance sheet events
There have been no post balance sheet events which had a
material impact on the Group.
11 Alternative Performance Measures
Where relevant, adjusted measures of profit have been used
alongside statutory definitions. The main items that are added back
to statutory profit are: amortisation from acquired intangible
assets, impairment, restructuring costs, acquisition &
financing costs and share option costs. These items are excluded
from statutory measures of profit to present a measure of cash
earnings from underlying activities on an ongoing basis. This is in
line with management information requested and presented to the
decision makers in our business; and is consistent with how the
business is assessed by our providers of capital.
The following tables set out the Alternative Performance
Measures in respect of continuing operations:
6 months 12 months
to 30 6 months to 31
April to 30 April October
Continuing operations 2022 (unaudited) 2021 (unaudited) 2021
GBP000's GBP000's GBP000's
Adjusted EBITDA:
Profit before taxation 3,602 3,655 7,268
Add back:
Depreciation & Amortisation 5,328 5,043 10,204
Restructuring costs 119 160 (90)
Acquisition costs 11 6 (134)
Financing costs 30 29 110
Share option costs 1,249 784 1,789
Net finance costs 651 462 372
------------------ ------------------ ------------
Adjusted EBITDA 10,990 10,139 19,519
================== ================== ============
Free cashflow:
Net cashflow from operating activities 11,127 17,775 16,554
Capex (3,588) (3,097) (5,747)
Lease payments (509) (678) (1,154)
Free cashflow 7,030 14,000 9,653
================== ================== ============
Net debt / (cash):
Cash (21,560) (29,159) (18,283)
Bank borrowings 14,466 10,207 15,394
Bonds in issue 10,848 11,364 10,998
------------------ ------------------ ------------
Net debt / (cash) 3,754 (7,588) 8,109
================== ================== ============
Adjusted profit for the period and adjusted
earnings per share:
Profit for the period 3,075 3,005 6,031
Add back:
Amortisation from acquired intangibles 1,881 1,737 3,561
Restructuring costs 119 160 (90)
Acquisition costs 11 6 (134)
Financing costs 30 29 110
Share option costs 1,249 784 1,789
Tax rate changes - - 826
Tax effect (882) (640) (1,841)
------------------ ------------------ ------------
Adjusted profit for the period 5,483 5,081 10,252
================== ================== ============
Weighted average number of shares in
issue - basic 441,605,209 439,422,715 440,376,576
Weighted average number of shares in
issue - diluted 451,820,113 449,232,657 451,125,653
Adjusted basic earnings per share 1.24p 1.16p 2.33p
Adjusted diluted earnings per share 1.21p 1.13p 2.27p
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END
IR FLFITRVISLIF
(END) Dow Jones Newswires
June 15, 2022 02:00 ET (06:00 GMT)
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